Top economics bloggers are feeling a renewed sense of pessimism about the U.S. economy, according to the third quarter 2010 Kauffman Economic Outlook: A Quarterly Survey of Leading Economics Bloggers. Sixty-eight percent of economics bloggers who responded to the mid-July survey described the economy's overall condition as "mixed," with the rest split three to one toward an assessment of "weak" rather than "strong." Worse, only 5 percent of respondents believe the economy is "better than official government statistics show," while 47 percent think it is worse.
Research highlights include:
- None of the respondents assessed the U.S. economy's overall condition as "strong and growing." Overall opinion has shifted sharply negative since the previous quarter. Many bloggers acknowledged the possibility of a double-dip recession in response to a question from Econbrowser.com's James Hamilton: the average probability among respondents was 44 percent.
- The bloggers expect the U.S. budget deficit to grow stronger than any other variable over the next three years. They also see higher poverty (doubled from second-quarter expectations) and inequality levels in the United States, meager stock market growth, and a slight decline in U.S. competitiveness. On a brighter note, three-year projections also include a relatively strong increase in global output.
- Respondents rate overall business conditions as "mostly fair, partly bad," but a majority (57 percent) believe conditions for small business in particular are "bad" or "very bad."
- A large majority—70 percent—of the surveyed bloggers say the federal government is too involved in economic matters, despite the largely non-partisan identification of the respondents.
- Only one of the 68 respondents supports a "tax on the product of foreign labor," a policy proposed by Andy Grove in a 2010 Bloomberg Businessweek commentary.
The third Quarterly Outlook also features questions from individual economics bloggers. Allison Schrager (Economist.com's Free Exchange) asked about the equity premium and found that bloggers believe it to be worse than most pension models are prepared for. Virginia Postrel (Dynamist.com) asked about the viability of green energy and electric cars, and 58 percent of bloggers expect that "neither" will be viable without government subsidies ten years from now. Jeff Miller (A Dash of Insight) asked which elements of the "Bush era" tax cuts are likely to be extended, and the outlook was grim for dividends, capital gains, and estate tax repeal.